Maryland Considering Shift in Teacher Pension Costs to Counties

January 6, 2012 (PLANSPONSOR.com) – Maryland Governor Martin O’Malley is weighing a proposal to shift some of the pension costs for the state’s public school teachers to the local governments that employ them.

Such a proposal “has been part of our discussions,” as the governor and his aides ready O’Malley’s fiscal 2013 budget and legislative agenda, the governor’s spokeswoman Raquel Guillory said, according to The Gazette. A spokesman for Maryland’s counties said the local governments would vigorously oppose any effort to shift teacher pension costs.

The news report said during the 2010 General Assembly session, the state Senate passed a bill to gradually shift half of the pension costs for local teachers, librarians and community college faculty to the counties and Baltimore city. However, the state House refused to pass the bill, and the legislature set up a commission to study the matter.

The Public Employees’ and Retirees’ Benefit Sustainability Commission since has twice recommended the governor and legislature phase in, over at least three years, a system in which local governments pay half the cost of teacher pensions, among other proposed reforms. In its December 2010 report to the governor and legislature, the commission noted teacher salary hikes “represent a major component of growing retirement costs.”

Maryland’s employee pension fund has a $19 unfunded liability, $11 billion of which is from teacher pensions, said Michael Golden, director of external affairs for the Maryland State Retirement Agency, according to The Gazette.